Apple/Google End ‘Thermonuclear’ War – But What of Samsung?

Apple and Google have announced in a joint statement that they have ‘agreed to dismiss all the current lawsuits that exist directly between the two companies’ and ‘to work together in some areas of patent reform.’

The statement goes on to say that ‘[t]he agreement does not include a cross license.’

The settlement is symbolically significant.  It has been widely accepted, since the commencement of Apple’s various patent lawsuits against Android-based handset makers back in 2010, that the ‘true’ target of all this litigation was Google, as the provider of the Android operating system.  This was confirmed in Walter Isaacson’s authorised biography of Steve Jobs, which revealed the late Apple CEO’s strong animosity towards Google, including his infamous vow to ‘go thermonuclear war’ to ‘destroy Android’.

At the time, however, Apple faced a challenge in striking directly against Google, which did not actually manufacture and sell any Android-based products of its own.  Rather than pursue some complex (and potentially unsuccessful) indirect infringement theory against Google itself, Apple chose to attack Android by suing manufacturers, such as HTC, Motorola and Samsung, which it saw as responsible for direct infringement of its patents.

Now, more than four years after Apple’s ‘first strike’ against Taiwanese smartphone maker HTC, it is very clear that Android has not been, and will not be, ‘destroyed’ by patent litigation.  On the contrary, in Q1 2014, 81% of smartphones shipped were Android-based, while just 16% ran Apple’s iOS.  Tit-for-tat lawsuits have ultimately resulted in little more than a growing series of stalemates, the most recent of which was a ruling in the dispute between Apple and Samsung in California earlier this month which is widely regarded as inconsequential to both parties.

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Tags: Apple, Google, Motorola, Samsung, Smartphone wars

There Ain’t No Such Thing as a Free Video Codec

Google, Inc recently achieved something that perhaps no other company or organisation on the planet could have done – it secured an agreement from most of the major corporate owners of patents relating to digital video coding standards, which will enable developers and users to access digital video on the web without payment of patent royalties.

At least, this is what will happen if the World Wide Web Consortium (W3C) takes up the opportunity that Google has created.  However, Google’s recent publication of the proposed terms of a royalty-free cross-licence for implementers of it’s digital video technology has drawn predictable criticism from a number of sources, including Open Source Initiative President Simon Phipps (‘proposal closes door on software freedom’) and FOSS Patents blogger Florian Mueller (effectively accusing Google of hypocrisy and disingenuousness).

It is easy to be cynical about the motivations of a company as large and ubiquitous as Google.  But it is worth having a closer look at exactly what Google has achieved here, regardless of its level of self-interest.  In my opinion, the deal that Google has struck is a significant step forward for royalty-free and open standards on the internet.  And while it is never going to satisfy those individuals and organisations at the more radical end of the free software and/or anti-patent movements, as a practical matter the deal will give the vast majority of internet users an assurance that there will be an open source and royalty-free video standard available for use on the World Wide Web.

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Tags: FRAND, Google, Open source, Technology standards

The Fraught Issue of FRAND III: Antitrust and the Future of FRAND

In Part I of this series, we introduced a few background concepts, namely: FRAND licensing; royalty stacking; and patent pooling. In Part II we focussed on the recent political manoeuvrings of various interested parties, in particular Google, Apple and Microsoft. In this final part, we look at the tension between patents, FRAND licensing agreements and competition law, and what this might mean for the future of FRAND and the current disputes.

On 31 January 2012, the European Commission (EC) announced that it has opened a formal antitrust investigation into whether Samsung’s use of its standards-essential patents constitutes illegal anticompetitive behaviour.  It had been conducting a ‘preliminary investigation’ for some months, as part of which the EC had requested that both Samsung and Apple provide information regarding ‘the enforcement of “standards-essential” patents in the mobile telephony sector’.  Samsung’s response at the time was that it had ‘at all times remained committed to fair, reasonable and non-discriminatory (FRAND) licensing terms’ for its wireless standards-related patents,” and was cooperating fully with the EC.

Since then, both Apple and Microsoft have filed official complaints about similar behaviour by Motorola Mobility (with Microsoft’s complaint also naming Google).

The main competition concern appears to be over holders of standards-essential patents seeking injunctions based on those patents, which they have pledged to make available on FRAND terms.  As discussed in our previous article in this series, we cannot see why a patentee should not be entitled to an injunction in appropriate circumstances, such as when another party has refused to take a license on identical terms to other licensees.  However, Europe’s competition regulator, and companies that do not have large portfolios of standards-essential patents, may well see things differently.

In this final article in our series on FRAND we look at the antitrust complaints, the effect these may have on the balance of power in the ongoing disputes, and what this may mean for future developments.

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Tags: Apple-v-Samsung, Competition law, Europe, FRAND, Google, Licensing, Microsoft, Motorola

The Fraught Issue of FRAND II: the Politics of FRAND

In Part I of this series, we introduced a few background concepts, namely: FRAND licensing; royalty stacking; and patent pooling. In this article we will focus more closely on the recent political manoeuvrings of various interested parties.  Part III looks at antitrust issues and how the current disputes over standards-essential patents might be resolved. 


In particular, recent actions by Apple, Microsoft, Google and the European Commission are of interest:

1. the reported ‘leaking’ of a letter from Apple to the European Telecommunications Standards Institute (ETSI), dated 11 November 2011, complaining about ‘a lack of consistent adherence to FRAND principles’;
2. Microsoft issuing a statement promising to make ‘essential patents’ available to competitors at fair and reasonable licensing rates, and promising not to seek injunctions or exclusion orders against unlicensed companies making products that infringe these patents;
3. reports that Google was informing standards setting organizations that Motorola Mobility's standards-essential patents will continue to be available on FRAND terms after its acquisition of the company, followed closely by a ‘leak’ of Google’s actual letter to the IEEE standards body; and
4. the decision of the European Commission (EC) to open a formal antitrust investigation into whether Samsung’s use of its standards-essential patents constitutes illegal anticompetitive behaviour.

Notably, all of the companies identified above – not to mention the EC – are large, powerful and well-heeled.  They do not need to make promises or issue complaints, or launch investigations, in order to resolve their differences.  If they wished to do so, they could settle everything amongst themselves behind closed doors. 

Failing this, all of the companies involved are perfectly capable of funding the litigation necessary to have the courts decide their disputes for them.  And we should not forget that this is the role of the court in civil litigation – to reach decisions, based on the law, about disputed matters coming before it, and to make orders as to how the parties are to settle their differences.  In short, parties go to court to get an adjudication because they could not – or would not – sort their issues out for themselves.

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Tags: Apple-v-Samsung, Competition law, Europe, FRAND, Google, Licensing, Microsoft

The Fraught Issue of FRAND I: A FRAND Primer

This is the first of a three part series of articles.  Part II looks at recent political manoeuvrings of various interested parties, in particular Google, Apple and Microsoft.  Part III covers antitrust issues and how the current disputes over standards-essential patents might be resolved.

Readers who have been following the various mobile device patent disputes over the last few weeks will almost certainly have encountered the term FRAND (‘Fair, Reasonable and Non-Discriminatory’) in relation to patent licensing, and the rights of patent-holders – such as Samsung and Motorola – to sue competitors – such as Apple – for injunctions barring sales of competing products.

However, those not involved in patent licensing might never have heard of FRAND until recently.  A few time-limited Google searches for the term ‘FRAND licensing’ reveals 345,000 results for the past year, with 160,000 for the past month.  Going back, however, there are 104,000 results for the previous 12 months, and only 74,000 for the 12 months prior to that.  Additionally, while the older results are largely legal texts, academic commentary and policy documents, recent results come primarily from the media, including traditional mainstream outlets, as well as online sources such as industry, trade and technology news sites and blogs.

Thanks to some highly-publicised actions by some high-profile entities, FRAND is now pretty much mainstream, at least within the technology media.

The tenor of much recent online commentary is to the effect that the use of FRAND, or ‘standards essential’, patents as weapons in the patent ‘wars’ is at least unethical, probably unconscionable, and possibly illegal.

But before you pick sides in the debate over FRAND, we think there are a few matters you need to mull over, which are not getting the airing they deserve.  And the first, and most important, of these is that most of the current fuss over FRAND is political, not legal, and its media profile is largely the result of carefully-executed PR work by the main players, including Apple, Google, Microsoft, and even the European Commission.

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Tags: Apple-v-Samsung, Competition law, Europe, FRAND, Google, Licensing, Microsoft

Google and Motorola – Patentology On the Radio

Independent current affairs program The Wire, which goes out daily on a number of community radio stations around Australia, today broadcast a piece on Google’s acquisition of Motorola Mobility (see Google Joins the ‘Hardware Club’ While Microsoft Whines).

We were contacted by producer/journalist Farah Ahmed for comment, and were very pleased to contribute to the story, which can be downloaded here: ‘Google acquires Motorola Mobility’ at The Wire (MP3, 4 minutes, 1.6MB).

Overall, it is a very good piece. which manages to cover quite a lot of ground and to achieve a fair balance of perspectives, especially considering the time constraint.

The story opens with a quotation from the recent blog post by Google’s Chief Legal Officer David Drummond, which we reported in Apple v Samsung: Google Says It’s All About Android, specifically his statement that ‘Microsoft and Apple have always been at each other’s throats, so when they get into bed together you have to start wondering what's going on.’

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Tags: Acquisitions, Google, News, Smartphone wars

Google Joins the ‘Hardware Club’ While Microsoft Whines

If you have an interest in this blog, then you most likely already know that Google has announced its intention to buy Motorola Mobility, the handset division recently spun-off by Motorola, for a cool US$12.5bn.

There is no shortage of commentary already on the web, regarding whether or not this is a reasonable price for Google to pay, or whether the purchase is really just about boosting Google’s patent portfolio after missing out on acquiring patents from either Novell or Nortel.

Regardless of what others may be saying, we consider that Google has struck a pretty good deal, despite the fact that the price it is paying represents a 63% premium on the closing price of Motorola Mobility shares last Friday.  Firstly, this is a purchase that it can easily afford, considering that various reports place its cash reserves (prior to this deal) at around US$36bn.  The relatively high premium may simply mean that the market had undervalued Motorola Mobility.  More likely, however, the value-add to Google of acquiring the company is far greater than the price it has paid.

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Tags: Acquisitions, Android, Google, News, Smartphone wars

Apple v Samsung: Google Says It’s All About Android

As the ‘patent war’ over smart phone and tablet devices continues, Google Senior Vice President and Chief Legal Officer David Drummond has publicly alleged that legal actions by ‘Microsoft, Oracle, Apple and other companies’ against Barnes & Noble, HTC, Motorola and Samsung are really all about Android.

In a posting on the Official Google Blog, Drummond states:

…Android’s success has yielded something else: a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents.

So what is Drummond trying to say here?  That it is all a big conspiracy, and poor little Google is the target?  That companies with technologies which compete with Android have formed an evil cartel to squash competition?  This all seems a bit rich, and Google’s claims that this is really about their technology, and the incumbents’ fear and loathing of the upstart, smack somewhat of the new kid on the block crying out for attention.

In other words, all this whining is neither very attractive, nor particularly mature.

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Tags: Android, Apple-v-Samsung, Australia, Computer programs, Google, Infringement, Licensing, Litigation, Smartphone wars